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SOGAZ GROUP International Financial Reporting Standards Consolidated Financial Statements and Independent Auditor's Report 31

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SOGAZ GROUP International Financial Reporting Standards Consolidated Financial Statements and Independent Auditor's Report 31 SOGAZ GROUP International Financial Reporting Standards Consolidated Financial Statements and Independent Auditor’s Report 31 December 2018 SOGAZ GROUP CONTENTS INDEPENDENT AUDITOR’S REPORT ............................................................................................................................... 3 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statement of Financial Position ..................................................................................................................... 6 Consolidated Statement of Profit or Loss and Other Comprehensive Income ..................................................................... 7 Consolidated Statement of Changes in Equity .................................................................................................................... 9 Consolidated Statement of Cash Flows ............................................................................................................................. 10 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1 Introduction ............................................................................................................................................................ 11 2 Operating Environment .......................................................................................................................................... 11 3 Summary of Significant Accounting Policies .......................................................................................................... 11 4 Critical Accounting Estimates and Judgements in Applying Accounting Policies ................................................... 29 5 Adoption of New or Revised Standards and Interpretations ................................................................................... 30 6 New Accounting Pronouncements ......................................................................................................................... 31 7 Cash and Cash Equivalents ................................................................................................................................... 33 8 Deposits with Banks ............................................................................................................................................... 34 9 Financial Assets at Fair Value through Profit or Loss ............................................................................................. 34 10 Financial Assets Available for Sale ........................................................................................................................ 36 11 Investments in Associates ...................................................................................................................................... 37 12 Receivables ............................................................................................................................................................ 38 13 Prepayments .......................................................................................................................................................... 41 14 Investment Property ............................................................................................................................................... 41 15 Financial Assets Held to Maturity ........................................................................................................................... 42 16 Premises and Equipment ....................................................................................................................................... 43 17 Intangible Assets .................................................................................................................................................... 44 18 Insurance Provisions .............................................................................................................................................. 45 19 Evaluation of Insurance Liabilities .......................................................................................................................... 50 20 Payables ................................................................................................................................................................ 55 21 Other Liabilities....................................................................................................................................................... 55 22 Share Capital and Reserves .................................................................................................................................. 56 23 Non-controlling Interest .......................................................................................................................................... 58 24 Analysis of Premiums and Claims .......................................................................................................................... 59 25 Acquisition Costs Net of Commission Income from Ceded Reinsurance ................................................................... 59 26 Other Insurance Income and Expenses ................................................................................................................. 60 27 Interest Income....................................................................................................................................................... 60 28 Administrative and Other Operating Expenses ...................................................................................................... 61 29 Other Operating Income ......................................................................................................................................... 61 30 Income Tax ............................................................................................................................................................ 62 31 Financial and Insurance Risk Management ........................................................................................................... 65 32 Capital Management .............................................................................................................................................. 74 33 Contingent Assets and Liabilities............................................................................................................................ 75 34 Fair Value of Financial Instruments ........................................................................................................................ 77 35 Presentation of Financial Instruments by Measurement Category ......................................................................... 83 36 Related Party Transactions .................................................................................................................................... 84 37 Main Subsidiaries and Business Combinations ...................................................................................................... 85 SOGAZ GROUP Consolidated Statement of Profit or Loss and Other Comprehensive Income In millions of Russian roubles Notes 2018 2017 INSURANCE ACTIVITY Gross premiums written 24 224 944 177 247 Premiums ceded (30 061) (32 069) 194 883 145 178 Change in provision for unearned premiums, gross 18 (13 241) (9 472) Change in reinsurers’ share in provision for unearned premiums 18 (1 194) 4 629 (14 435) (4 843) Net premiums earned 180 448 140 335 Gross claims paid 24 (123 036) (82 972) Reimbursement of claims for risks ceded to reinsurers 25 613 4 077 (97 423) (78 895) Change in loss provision, gross 18 1 160 (28 145) Change in reinsurers’ share of loss provision 18 (22 889) 15 929 (21 729) (12 216) Claims handling expenses (5 946) (3 828) Net claims incurred (125 098) (94 939) Acquisition costs net of commission income from ceded reinsurance 25 (17 522) (11 381) Subrogation income 1 231 941 Change in unexpired risk provision 18 - 13 Other insurance income 26 1 749 1 362 Other insurance expenses 26 (7 754) (1 618) Total result from insurance activity 33 054 34 713 INVESTMENT ACTIVITY Interest income 27 17 493 16 092 Unrealised (losses less gains) / gains less losses from financial assets at fair value through profit or loss (477) 143 Realised (losses less gains) / gains less losses from financial assets at fair value through profit or loss (11) 249 Realised gains / (losses) from financial assets available for sale 43 (149) Dividend income 103 118 Foreign exchange translation gains less losses / (losses less gains) 3 940 (564) Other investment (losses less gains) / gains less losses (534) 91 Total result from investment activity 20 557 15 980 Administrative and other operating expenses 28 (19 441) (15 895) Other operating income 29 6 240 4 516 Share of profit of associates 11 23 078 62 Profit before tax 63 488 39 376 Income tax expense 30 (12 970) (8 814) Profit for the year 50 518 30 562 The notes set out on pages 11 to 88 form an integral part of these consolidated financial statements 7 SOGAZ GROUP Consolidated Statement of Profit or Loss and Other Comprehensive Income (continued) In millions of Russian roubles Notes 2018 2017 OTHER COMPREHENSIVE (LOSS) / INCOME: Items that may be reclassified subsequently to profit or loss: (Losses) / gains arising from financial assets available for sale 22 (828) 455 Realised (gains) / losses transferred to profit or loss 22 (43) 149 Change in currency translation reserve 22 82 40 Share of other comprehensive income of associates 11, 22 - 21 Income tax recognised directly
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